The Public Sector Wage Premium in Spain: Evidence from Longitudinal Administrative Data

49 Pages Posted: 15 Aug 2014

See all articles by Laura Hospido

Laura Hospido

Banco de España - Research Department

Enrique Moral-Benito

Banco de España; Universidad Carlos III de Madrid

Multiple version iconThere are 2 versions of this paper

Date Written: August 14, 2014


This paper studies the public sector wage gap in Spain by gender, skill level and type of contract, using recent administrative data from tax records. We estimate wage distributions in the presence of covariates separately for men and women in the public and in the private sectors, and we take advantage of the longitudinal structure of the data to control for selection. We find a positive public wage premium for men and women even after accounting for characteristics and endogenous selection; the observed average gap in hourly wages of 35 log points is reduced to 20 when accounting for observed characteristics, and to 10 once endogenous selection is also taken into consideration. We also find substantial variation in the public premium along the wage distribution once observed characteristics are accounted for. This variation, however, is offset by opposite patterns of selection into the public sector: while we observe positive selection into the public sector at the bottom of the wage distribution, workers at the top of the distribution select negatively into the public sector.

Keywords: public sector wage gap, quantile regression, wage distribution, panel data

JEL Classification: C21, C23, J31, J45

Suggested Citation

Hospido, Laura and Moral-Benito, Enrique, The Public Sector Wage Premium in Spain: Evidence from Longitudinal Administrative Data (August 14, 2014). Banco de Espana Working Paper No. 1422, Available at SSRN: or

Laura Hospido (Contact Author)

Banco de España - Research Department ( email )

Alcala 48
Madrid, 28014
+34 913385625 (Phone)
+34 913385678 (Fax)


Enrique Moral-Benito

Banco de España ( email )

Alcala 50
Madrid 28014

Universidad Carlos III de Madrid ( email )

CL. de Madrid 126
Madrid, Madrid 28903

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